In short: UK card machine fees usually include a transaction fee (a percentage per sale, often around 1.75%), a monthly hardware or software cost, and sometimes an authorisation fee, terminal rental, PCI DSS compliance charge, and chargeback fees. Some providers, like SumUp and Square, charge per transaction only with no monthly fee.
The headline rate a provider advertises is rarely the whole story. Here's every fee that can land on a UK card machine bill, what's normal, and where the catches hide.
1. The transaction fee
This is the percentage (and sometimes a few pence) taken from every card sale. UK pay-as-you-go providers typically sit around 1.69%–1.75% for in-person payments, while quote-based acquirers can offer lower blended or interchange-plus rates at higher volumes.
Watch for different rates by card type - premium, commercial and international cards often cost more than a standard UK debit card.
2. The monthly fee
Pay-as-you-go providers (SumUp, Square, Zettle) charge £0 a month - you only pay per transaction. Quote-based providers (Dojo, Worldpay, Barclaycard, Tyl) often charge a monthly fee plus terminal hire.
A monthly fee isn't automatically bad: at higher volumes a lower transaction rate can more than pay for it. Our fee calculator works out where the crossover is.
3. Hardware cost
You either buy the reader outright (£19–£599 depending on the device) or hire/finance it monthly. Buying is usually cheaper long-term; hiring spreads the cost but can lock you into a term.
4. Payout / settlement charges
Standard payouts (1–2 working days) are usually free. Instant or same-day payouts often cost extra - a flat fee or a small percentage. If cash flow is tight, factor this in.
5. The fees providers prefer to bury
These are the ones that don't make the homepage:
- Chargeback fees when a customer disputes a payment
- PCI compliance fees or non-compliance charges (more common with traditional acquirers)
- Authorisation fees per transaction on some merchant accounts
- Early cancellation / exit fees on fixed contracts
- Minimum monthly service charges if you don't hit a turnover threshold
So what actually matters?
For low volumes, the transaction rate and zero monthly fee dominate - pay-as-you-go wins. For higher volumes, a slightly lower rate with a monthly fee can be cheaper overall, but only if there's no contract trap. Always check the total cost of ownership, not just the headline percentage.
FAQs
What's a typical card machine transaction fee in the UK?
Pay-as-you-go providers are usually around 1.69%–1.75% per in-person transaction. Quote-based acquirers may offer lower blended rates at higher volumes, but add monthly and hardware costs.
Are there card machines with no monthly fee?
Yes - SumUp, Square, Zettle and entry myPOS plans have no monthly fee. You buy the reader and pay a percentage per sale.
Do card machine fees include VAT?
It varies. Some providers quote fees excluding VAT, so a transaction rate or monthly cost can be higher than it first looks. Always check whether prices shown are inclusive or exclusive of VAT, as VAT-registered businesses can usually reclaim it on their return.
Can I pass card machine fees on to customers in the UK?
You can add a surcharge to business and corporate cards, but UK rules ban surcharging on consumer debit and credit cards. For most small shops serving the public, that means you cannot legally charge customers extra for paying by card.
Are card machine fees tax deductible?
Yes. Card machine transaction fees, rental and monthly costs are legitimate business expenses, so you can usually deduct them when working out taxable profit. Keep your provider statements as records for HMRC, as they show the fees taken from each payout.
Reviewed by Nathan Keeble - Founder, The POS
Independent UK payments research. We research the pricing, read the small print and write it up in plain English.